Social Security: The Lump-Sum Death Benefit

"When a worker who is insured by Social Security and living with a spouse dies, the spouse is entitled to a lump-sum death benefit of $255. If there is no such spouse, the payment can be made to a surviving child who is receiving or is eligible to receive benefits based on the deceased person’s work. In the majority of deaths, however, no payment is made.

The death benefit was once a more important part of Social Security, in terms of percentage of total benefits paid and size of the benefit compared with monthly survivor benefits: the only benefits paid out between 1937 and 1939 were lump-sum benefits to survivors of workers who died before turning 65 years old, and until 1950, the lump-sum death payment was the only benefits some survivors of deceased workers could receive. However, because the payment has been fixed at $255 for the past four decades, inflation has eroded its value. At the same time, the real value of other Social Security benefits has increased. Total federal spending on lump-sum death benefits is now about $209 million,  less than 0.03% of the total Social Security (Old-Age, Survivors, and Disability Insurance) benefits..."
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